Massey Energy acquires Cumberland Resources

April 19, 2010

Source: Massey Energy Company

Massey Energy Company (MEE) said that it acquired Cumberland Resources Corporation and its affiliated companies for a purchase price of $640 million in cash, subject to working capital adjustments, and 6,519,034 shares of Massey common stock. The number of shares issued was calculated by dividing $320 million by the average closing price of Massey common stock for the 20 trading days ending on April 16, 2010. Cumberland was one of the largest privately held coal producers in the United States with 2009 produced coal revenue of $550 million generated from the production and sale of 7.8 million tons of high quality Central Appalachian coal. Massey acquired Cumberland free of debt.

The Cumberland operations include primarily underground coal mines in Southwestern Virginia and Eastern Kentucky. The acquisition includes an estimated 416 million tons of contiguous coal reserves, a preparation plant in Kentucky served by the CSX railroad and a preparation plant in Virginia served by the Norfolk Southern railroad. Of the estimated reserves, Massey believes more than half (216 million tons) have metallurgical coal qualities. Including the acquired Cumberland reserves, Massey now has an estimated total reserve base of 2.9 billion tons, of which approximately 1.3 billion tons are of metallurgical quality.

Massey's Chairman and CEO, Don Blankenship, was unable to attend the closing. Speaking on his behalf, Phillips noted that Blankenship has been extremely enthusiastic about the transaction as he considers Cumberland to be a great asset and an excellent fit with Massey's business strategy.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Logistics Risk Management in the Transformer Industry

Transformers often are shipped thousands of miles, involving multiple handoffs,and more than a do...

Secrets of Barco UniSee Mount Revealed

Last year Barco introduced UniSee, a revolutionary large-scale visualization platform designed to...

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...

Latest PennEnergy Jobs

PennEnergy Oil & Gas Jobs